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Posts Tagged ‘Treasury Department’

What a week it’s been. The $700,000,000,000 “bailout” or “rescue” package, the McCain/Obama debate, and now word that Citi Group has bought Wachovia has given the news networks just about reason enough to be 24-hour. As usual, though, Past & Prologue will try to dig through the noise. Today, the New York Times and Washington Post are both reporting on a story, we think deserves your attention and will warrant close coverage leading into the next administration – whoever that may be.

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Both the New York Times and the Wall Street Journal are reporting today that the Treasury’s bailout plan is pushing forward through Congress. The plan is not without its detractors, however. See the flip side for a quick rundown and some irresponsible predictions…

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$700 billion + $85 billion + $200 billion = the amount of money the federal government has launched into the nation’s financial system over the last two weeks. The Treasury and the Federal Reserve are playing Monopoly, buying up all the real-estate it can: $29 billion worth of Bear Sterns (so Goldman Sachs could buy the bank for fractions of pennies on the dollar), some $200 billion for mortgage giants Fannie Mae and Feddie Mac, $85 billion for American International Group (AIG), and as of Saturday – $700 billion for whoever else needs some allowance money for the next few weeks. And as if that weren’t enough, some argue there is over a trillion dollars of bad debt mucking up the financial system – so the government has raised its debt ceiling from $10.6 trillion to $11.3 trillion.

So much for the numbers; it’s good to have a nice baseline – a clear understanding of just how many gold $500 bills you’ll need as the banker in this game. And make no mistake, as taxpayers, we are all the bankers in this game of Monopoly, we just happen to be playing against other bankers who’ve run out of money. Now, usually when someone runs out of money in the Parker Brothers’ game, they curse and run off or fetch some collateral from Grandma. But this is no game – this is real and Lehman Brother’s just lost their building on Boardwalk, in Midtown Manhattan, to British investment firm, Barclays. (more…)

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